Shares of electric car maker Tesla could jump sharply in the next year as the company starts making money more consistently, according to an analyst at Baird.

Analyst Ben Kallo reiterated his outperform rating on the stock and hiked his price target to $465 from $411. Kallo’s new 12-month price target implies a 26.8 percent upside from Wednesday’s close of $366.60.

Tesla shares rose 1 percent to in the premarket Thursday, to $370.30.

“We believe the narrative will continue to change from ‘TSLA will never make money’ to ‘TSLA can be sustainably profitable,'” Kallo wrote in a note Thursday. “The narrative on TSLA, particularly in the middle of 2018, was as negative as we have experienced in our coverage, but we believe sentiment will continue to improve as the company proves it can be self-supportive, which should drive sustained share appreciation.”

Tesla reported a surprise third-quarter profit on Oct. 24. Since then, the stock is up more than 27 percent. That quarter was its third profitable one.

“We do not believe the strong Q3 results were a ‘flash in the pan’ and think TSLA could maintain profitability,” Kallo said. “Further execution will reinforce investor belief the company can be self-supportive, which should be a positive catalyst.”

Tesla shares have had a wild year. At one point, they were down more than 20 percent for 2018. They were also up as much as 22 percent year to date.

Tesla reached its 2018 high after CEO Elon Musk tweeted in August he had “funding secured” to take the company private. He would later walk back what he wrote in the tweet, agreeing to keep the company public. The Securities and Exchange Commission settled with Musk over charges stemming from his tweet. As part of the settlement, Musk agreed to step down from his chairman role for three years.

Moving forward, “we continue to believe there are several catalysts upcoming which could drive shares higher, and first-half 2019 results could benefit from easy comps given the Model 3 delay,” Kallo wrote. “TSLA could be entering a positive estimate revision cycle, which should coincide with several other catalysts, in our view, including start of European deliveries, initial production in China, introduction/production of new products, and inclusion in the S&P 500.”

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